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What is the Federal Reserve?When Federal Reserve Chairman Rob Rafaelson awakes with amnesia only moments before a big press conference, his children, maid and intern must explain the Fed to him using the only thing handy: the children’s toys.

Catherine Hardwicke

CATHERINE HARDWICKE is best known as the director of “Twilight,” which launched the worldwide blockbuster franchise, “The Twilight Saga.” Her directorial debut was the critically acclaimed, “Thirteen,” which won the 2003 Director's Award at the Sundance Film Festival, two Golden Globe nominations, an Academy Award nomination for Best Supporting Actress, and an Independent Spirit Award. Additional directing credits include “Red Riding Hood” and “Lords of Dogtown.” As a production designer, her credits include David O. Russell’s “Three Kings,” Richard Linklater’s “Suburbia,” Lisa Cholodenko’s “Laurel Canyon,” Cameron Crowe’s “Vanilla Sky,” “Tombstone” and “Tank Girl.” Recently, Hardwicke has directed pilots for CBS and MTV, both of which have gone to series. She holds a Bachelor of Architecture degree from UT Austin, and did graduate work at UCLA Film School.

Director's Note

“When I first began speaking with John Steele Gordon about the Federal Reserve, I admit, I didn’t have a clue about our country’s central banking system. I thought it was an amazing challenge to try and explain the Fed in an entertaining and digestible way, in 10 minutes or less. It takes longer than that to read the Wikipedia article!

We had a blast recreating the Federal Reserve System with children’s toys, including a LEGO model of the Fed Building in DC. I just hope it encourages people to dig a little deeper!”

Quiz

The purpose of the Federal Reserve is to:

All of these

Process financial transactions for the government

Influence the country’s money supply

Supervise and regulate banks

The Fed was created to help preserve and bring order to the U.S. economy during turbulent times. It is also charged with maintaining economic growth. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe one in 1907.

The President appoints the Federal Reserve Chairman, but who does the Fed Chair answer to?

Congress

The Secretary of the Treasury

The World Bank

The Board of Governors of the Federal Reserve

Though the Federal Reserve Chair is appointed by the President of the United States, he or she actually answers only to to the Board of Governors of the Federal Reserve. The Fed Chair is also mandated by law to report to Congress two times per year.

In a recession, the Federal Reserve’s primary method for stimulating the U.S. economy involves:

Printing more currency

Cutting taxes

Lowering interest rates

Spending on infrastructure

By lowering interest rates the Fed makes it cheaper for banks, businesses and consumers to borrow money. This is how the central bank gets more money flowing in the U.S. economy. These transactions are conducted electronically. The Fed does not physically print more money. (The U.S. Mint is responsible for printing currency).

Twitter

Weighing The Week Ahead: Can The Fed Meet Expectations?

@hw2vladerxe

Federal Reserve injected more than $400 Billion into the banks yesterday for Q3 end window dressing. Largest (by a mile) ever. Why not news?

@JF991

Saving is what is supposed to lead to investment. But why save and get no return if The Fed is going to undermine the demand for you money?

@mikehostile

56% of the Fed's $4.2 trillion in securities have maturities beyond 10 years. How long does Yellen expect normalization to take?

@JasaykoCFA

Did you know?

During Fiscal Year (FY) 2013, the Bureau of Engraving and Printing delivered approximately 26 million notes a day with a face value of approximately $1.3 billion.

The oldest central bank, Sweden’s Sveriges Riksbank, was formed in 1668, 245 years before the U.S. Federal Reserve.

Did you know that the average $100 bill stays in circulation about 9 years while $1 bills only last 22 months.

Alan Greenspan, Fed Chairman from 1987 to 2006, studied music at The Juilliard School and played jazz sax with Stan Getz.